BRIEF—CMS decision a relief to pharma manufacturers

This week, the US Centers for Medicare & Medicaid Services (CMS) announced it would hold off on a provision to rule  RIN 0938-AU28 that would have required pharmaceutical manufacturers to stack discounts and rebates to report a best price for the Medicaid drug rebate program.

Drug pricing and compliance expert Jesse Mendelsohn, senior vice president with Model N, believes this is a welcome relief to the pharma industry, as the provision would have been potentially calamitous.

He comments: "The provision, combined with the recent removal of the average manufacturer price cap on the unit rebate amount calculation, would have put many manufacturers 'underwater' in Medicaid - they’d be paying more in rebates for certain products than what they actually collected from the sale."

He added: “The legality of the provision aside, the rule simply didn’t add up. In practice, stacking discounts granted to completely different and entirely unaffiliated purchasers would have created an unreasonable price point that no single customer would have actually received.”